HomeMy WebLinkAbout2007-02-21 Budget Committee Minutes
BUDGET COMMITTEE MEETING
FEBRUARY 21, 2007- PAGE 1 OF 5
Budget Committee Meeting
Minutes
February 21, 2007, 6:00pm
Siskiyou Room, CDES Building, 51 Winburn Way
CALL TO ORDER
The Citizen’s Budget Committee meeting was called to order at 6:05 pm on February
21, 2007 in Siskiyou Room at 51 Winburn Way, Ashland Oregon.
ROLL CALL
Mayor Morrison was present. CouncilorChapman, Hardesty, Hartzell ,Jackson,
Navickas, and Silbiger were present. Budget Committee members Bond, Everson,
Gregorio, Heimann, Levine, Stebbins, and Thompson were present.
STAFF PRESENT: MARTHA BENNETT, CITY ADMINISTRATOR
LEE TUNEBERG, ADMINISTRATIVE SERVICES/ FINANCE
DIRECTOR
BRYN MORRISON, ACCOUNT REPRESENTATIVE
ELECTION OF A CHAIR, VICE-CHAIR/SECRETARY
Hardesty/Everson nominated Thompson as chair. All ayes.
Morrison/Stebbins nominated as Levine as vice chair. All ayes.
APPROVAL OF MINUTES
Approval of minutes from previous Budget Committee meetings dated:
5/22/06 Budget Committee Meeting
5/24/06 Budget Committee Meeting
Everson/Silbiger ms approval of minutes as presented. All ayes.
Public Input
none
Budget Officer Presentation FY 2007-2008 Process
Lee Tuneberg, Administrative Services/Finance Director spoke that staff just finished
the financial reports for December 2006 and it is a basis for projections for the FY 2008
proposed budget. He spoke to the current year budget and that there is a Street
BUDGET COMMITTEE MEETING
FEBRUARY 21, 2007- PAGE 2 OF 5
Financing Task Force now that will look at the Capital Improvement Plan(CIP)and how
it is financed.He added that staff is currently going through a review of the CIP and it
wouldbe presented at the next Council meeting.
Departments had evaluated year to date in operations and capital improvements and he
had asked them to calculate their revenues and expenditures to the year end. He spoke
to new assumptions and a new approach for developing the proposed budget. Staff is
starting the budget as a baseline budget with add packages. He is proposing to use the
current years budget as a base to create the next years budget and to extrapolate for
the long term. This will be developed with no changes in rates, and then he will look at
how much contingency would be needed and what the ending fund balance would be
th
for financial viability. At the February 6
Council meeting staff presented a report on
creating the budget. Staff and Council saw a need to show citizens the costs of services
and control charges. Staff recommended capping revenue. This includes what to do
with AFN debt. It was determined that for the initial proposed budget, debt would be
internalized and departments would make room in their budgets without raising rates.
Staff would then look at the impact on services. Staff was directed to build their budgets
with today’s service levels. Staff will provide a balanced proposed budget with a list of
additions or subtractions, if needed to adjust the budget.
The goal is to create a budget without rate increases being factored in. Any rate
increase would have to be brought to Council for approval. Mr. Tuneberg explained that
there are some things that are due to natural growth due to things like population growth
and revenues and expenses could grow more than the 2% in some areas.
The Committee asked if the electric rate increase adopted in the FY 2006-07 budget
happened. Mr. Tuneberg explained that electric rate adjustments have not occurred to
date this year. He explained that utility rates and franchise rates are tied to them and
the General Fund would not get more revenue without raising the rates. He explained
that the General Fund has a larger fund balance than predicted at this point in the year.
He is still looking at the impact of a rate increase. Martha Bennett, City Administrator
explained that the revenues in the current fiscal year included the rate increases and
are in the basebudget for next year. The Committee asked if any other rate increases
are planned for the next year. Mr. Tuneberg explained that most of the enterprise
activities would need a rate increase in the next year. He pointed to the budget
message and summary table on rate increases. Page 1-14.
The Committee asked what base budget meant. Mr. Tuneberg explained that base
means that the departments built their budget using the current budget with an increase
only for which is identified as natural growth or 2% for example.
Property taxes were raised last year, and will be proposed at the same rate in FY 2007-
08. The Committee questioned other than the AFN debt, what other items did that rate
go toward and if they were accomplished. Mr. Tuneberg explained the Council Visioning
program will be rebudgeted and there were additional positions that still require funding.
Ms. Bennett explained that departments did not begin building their budgets by cutting
BUDGET COMMITTEE MEETING
FEBRUARY 21, 2007- PAGE 3 OF 5
positions;they would look at the financial viability and determine if that same rate would
continue to be levied.
Mr. Tuneberg explained that there would be no new positions in the base budget.
Departments will use actual percentages for union contracts to build personnel costs
and staff is anticipating an increase of 12-15% for health care and PERS. Staff may
budget 10% for healthcare and PERS overall cost will be stable. The non bargaining
union would have a 4% increase and the compression issue of salaries is being looked
into. The Committee asked if there are increases required by departments if others
would then be reduced. Ms. Bennett responded there might potentially be a reduction.
Mr. Tuneberg explained that they would have to calculate the impacts.
Mr. Tuneberg explained that staff will look to hold Capital expenditures at the same level
or less and will adhere to the fund balance policy. He added that they have established
a Telecommunications fund balance policy and the General Fund and Central Service
Fund at this point look to have a larger fund balance than anticipated. Staff is looking at
industry standards and increases and decreases that may happen. The Long Term
assumptions are difficult. Staff must determine how to deal with contingency in the long
term and is aware that there will be challenges ahead. There are target fund balances to
help adjust to swings in revenue.
The Committee questioned if staff under estimated revenue and overestimated
expenses, what the cost would be to tax payers. Mr. Tuneberg explained that the goal is
to come as close as possible and they use a consistent set of assumptions to build the
budget. A bigger concern to them is when a budget ends up only 90% expended and
they then have to look at were they budgeted wrong. The Committee and Staff
discussed how the departments would ask for increases. Staff will be asked to look at
what service would increase and what proposed funding source there would be for it.
Staff will discuss together the priorities and come to the Budget Committee with those
requests.
The Committee asked what would happen if a department’s revenue increased without
a corresponding expense. Mr. Tuneberg explained that it would depend on what it was
that caused that increase and the revenue would go to the ending fund balance for a
resource for the fund for the next year. The Committee discussed the CIP. Mr.
Tuneberg explained that the CIP is reviewed and approved by Council and the
Committee will see it after Council reviews it. The CIP that is adopted by Council will be
the baseline and the debt for those projects will be built into the budget.
The Committee discussed the effect the O & C funds would have on the City budget.
Mr. Tuneberg explained that staff is not certain on direct or indirect costs at this time but
will be researching the actual cost through the budget process. The actual cost may not
be known for a couple of years as it takes effect. The departments may bring the result
of those cuts to the Committee as add packages. The Committee questioned if
departments would be able to internalize that expense. Ms. Bennett explained that the
O & C funds reduction will mostly affect the departments within the General Fund, and
BUDGET COMMITTEE MEETING
FEBRUARY 21, 2007- PAGE 4 OF 5
staff will need to look at the impact realistically on how it pertains to service levels. The
General Fund departments will be asked to bring to the Committee add packages as
well as cut packages.
The Committee discussed that the budget will be prepared with the same level of
service and that they will be shown if a service will be eliminated and the impact on the
citizen. It was discussed that staff has been instructed to build their budget with
Materials and Services with the possibility of an increase only through natural growth
that would not require an increase in rates. The general assumption is a 3% growth in
assessed value and 2% in new construction.
Mayor Morrison suggested the City look at ways to maximize revenue possibilities. That
staff should look into ways to keep the revenue in Ashland. An example he gave was for
the Police to direct offenders to municipal court rather than circuit court. Mr. Tuneberg
explained that there are policy issues for directing offenders to municipal court rather
than circuitand some things are restricted such asambulance charges.
Process-timing-
Mr. Tuneberg spoke that tours would be available. There is local budget law training
provided by the Oregon Department of Revenue on March 8 and Staff would offer a
training on March 15. The Social Service grant meetings will be on March 5 and 7 at
7:00 pm. The Economic & Cultural is yet to be determined. Staff and Council are
working on a Resolution and guidelines on the use of transient occupancy tax funds.
Staff may have to distribute the applications without an updated set of guidelines.
The Committee discussed that they would prefer to begin the proposed Friday night
meeting on 4/6 at 4:00 pm. Staff will confirm once date is secured.
Staff asked for volunteers for the Social Service grant subcommittee. Hartzell, Everson,
Bond, Hardesty, Morrison, Heimann volunteered.
Mr. Heimann suggested to the Committee to hold a meeting after the process is
completed to look at the results of this process. Mr. Tuneberg responded that Council
asked to have a follow up meeting on 5/22 to discuss the process.
Mayor Morrison thanked the private citizens on the Committee and expressed the need
for a greater sense of agreement in this years budget. Last year was too close.
The Committee discussed how they would make decisions on the add and cut
packages. It was explained that the Committee would be given all the add packages at
the budget message and then they could decide how to proceed with them. Mr.
Tuneberg reminded the Committee that after each departmental presentation, they
would tentatively approve the budget. The Committee asked how the priorities are
ranked. Mr. Tuneberg explained that the department heads get together and talk about
the pressures they will see and they come to a consensus on the ranking. Ms. Bennett
BUDGET COMMITTEE MEETING
FEBRUARY 21, 2007- PAGE 5 OF 5
added that the department heads will present the Committee with data on their request
and how it will affectservice levels.
ADJOURNMENT
The meeting was adjourned at 7:48pm.
Respectfully Submitted,
Bryn Morrison
Account Representative